BIR chief: Alphaland's Oreta committed fraud

MANILA, Philippines - Bureau of Internal Revenue (BIR) Commissioner Kim Henares on Thursday accused Alphaland President Mario Oreta of committing fraud with regard to the company's controversial land deal with the Boy Scouts of the Philippines.

Former Makati Vice Mayor Ernesto Mercado exposed that Vice President Jejomar Binay received 5-percent kickback, which amounts to P200 million, from the deal between the Boy Scouts and Alphaland.

Alphaland owner Roberto Ongpin earlier denied the allegations, citing that the said percentage was compensation for Oreta.

During the Senate hearing on the alleged overpriced Makati City parking building, Sen. Alan Peter Cayetano said that he previously asked Oreta if he paid taxes for the said compensation.

Cayetano said that Oreta did not pay taxes for the said compensation.

Henares said that Oreta should have paid 32 percent of income tax for his compensation from the land deal.

"In this case there's already fraud so the surcharge is 50 percent... failure to include it or file a return for it so there's fraud," Henares told the Senate panel.

Citing Ongpin's previous sworn statement about the compensation, Henares stressed that the Oreta committed tax evasion for failure to pay income tax for compensation.

"If you do something to minimize tax for only that purpose, that is already tax evasion. If you did business and along the way it becomes efficient then that's tax avoidance. But to do it primarily to not pay taxes is tax evasion no matter what you say it is," Henares said.

Alphaland counsel Rodolfo Ponferrada defended Oreta, noting that the only applicable tax for the deal was the documentary stamp tax which they fully paid.

"The carried interest which Mr. Ongpin testified to during the last hearing was implemented in the most tax-efficient and cost-efficient manner," Ponferrada said.

Both Oreta and Ongpin were not present during the Senate hearing.

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